Saturday, May 27, 2017

Malefic Planets, Cycle-Waves Portend Big Drop Ahead

May 17 saw one of the largest drops of the stock market this year.  I believe we will see an even larger drop early next week. There are three distinct reasons apart from the daily MACD failing to make a new high along with the SPX. Firstly, we have Mars in Gemini opposing Saturn in Sagittarius on May 29, Memorial Day.  This is a violent combination with each in a mutable sign. Either there is likely to be a terrorist attack (God forbid) or an attack on another nation that they will likely blame the drop on.  I hope I’m wrong about the violence, but I’m positioned short with SPY puts based on other factors as well.

The SPX e-wave count is at a Y wave (as of May 25’s new moon) of an XYZ “B” wave bull flag with usually the larger Z wave down coming into the 8 TD low due May 31.  There is also a larger 16 TD low overdue that last ran 13 TD’s. May 31 is TD 19 balancing out to 32 TD’s.  On top of that, next week could easily fulfill the larger 10 week low due between 44-56 TD’s, and May 31 is TD 45 from the March 27 20-week low.

I give 2 scenarios as to what I believe will be the outcome in the charts below along with a longer term analysis of the GDX.  Overall, I believe the swift drop coming should be no more than the 2-3% range on the SPX. According to my reckoning, by June 9th, June 23rd or July 13th, we should see THE top that leads to at least a 15% correction into August 2017. June 23rd is my favored date, followed by June 9th then July 13.

How the far the fall goes (2344 or 2358), whether it finishes early in the day May 31 or late, whether or not there is a double bottom on June 2 plays into my three scenarios (scenario 3 is a sub scenario of scenario 2 extending into June 23rd from 2358 instead of June 9). 

As far as GDX is concerned, we should see a pop up early next week, but with some cooling down of the stock markets could be seeing GDX return back to near the 23.00 area before heading higher into around June 9 and the 24.50/.55 zone.  My analysis suggests a move lower from there into around July 10 to near 20.00.  A nice rally into the end of August may be commensurate with some severe stock market shocks that could involve the Middle East, Iran, China, North Korea or all areas. 

After August, I believe we see more sharp pull backs into January 2018 to below 20.00.  August 2018 should see an important peak in the miners before dropping hard into late 2022.  Some of the precious metals buffs may not want to hear this, but I don’t believe holding gold, silver or mining shares will protect them during the coming severe stock market bear of 2018-2020/21.

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Tuesday, May 23, 2017

Update May 23, 2017 SPY Chart

Watch for a drop Wednesday.  It's a buy the dips market right now. The next important top May 30 then June 6.  Next important bottom is May 24 and June 1.  An important low should occur around June 8, the 10 week low.  Last week was the 7 week low.  Wednesday this week is the three week low.

Thursday, May 11, 2017

Update May 11, 2017

The SPX has a target of 2369/70 late Monday, TD 21 from the last 16 TD low, very unusual. It is the 50% retracement of the March 27 to April 26 impulse.  It also represents the 7 week low from March 27.  The SPX made a dragonfly doji on Thursday.  This targets 2382 for Friday about mid session. Look for choppy trading ahead even into next week, OPEX week. Monday to Friday looks generally higher for stocks for OPEX week.

The next new moon is due May 25.  This should be the next top near SPX 2438 (A = C in time and price). 

GDX looks like it will gap up strongly on Friday and test 23.82.  It could go somewhat higher, but a close at 23.82 makes sense.  A follow through top is due on Monday, as the sellers will likely come and take profits.

The longer term target is June 21, 2017 just under 29.00.  GDX (currently at 22.38) looks extremely attractive.

Wednesday, May 10, 2017

Update 5/10/17

GDX rallied like I thought. We took profits awaiting Thursday's action. In cash for now.

The SPX still needs to fall to test the 2380 area minimum.  The 16 TD low can run 20 trading days and that day is Friday May 12, which is also a Bradley turn.  There is a 40 day cycle turn due May 24, which may end up being the top.  Weird Wollie Wednesday usually creates a low either Thursday or Friday prior to OPEX. We remain short.

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Tuesday, May 9, 2017

Update May 9, 2017

The stock market as measured by the S&P 500 looks to pull back at least to the 2375/76 area Wednesday then bounce.  We had a Sun trine Pluto today on TD 9 of the 8 TD top.  This suggests weakness ahead.  The full moon Wednesday means reversal.  The next topping area is due Friday May 12 with Mars trine Jupiter. It is also a Bradley turn.  It is possible that TD 12 (May 12) could be THE top, but it is uncertain at this point.

The mining shares (GDX) are beginning to look like they may have come alive again.  We could easily be in for a nice rally ahead.  Last Thursday, GDX made a low just one day past Mercury direct.  Today made a secondary low three days past THE low and held nicely.  Longer term players may wish to jump on board soon.

Monday, May 8, 2017

Stock Market “Double Top” B Wave

On Thursday last week, we closed out our short positions in the low 2380’s on the S&P 500, looking for a possible move above 2400 by May 5-8. Today tagged 2401, a new high, but at the same time made a classic double top ‘y’ wave.  The next expectation is a move down (wave ‘z’ of “B”) to near 2360, the 50% retracement from March 27th

The best time based on the 4/8/16/32 trading day lows is Wednesday May 10.
The Wednesday before monthly option expiration is known as “Weird Wollie Wednesday”(coined by Don Wolanchuck) and typically sees a low near that date before launching into Options Expiration week. This week sees the full moon on Wednesday along with Mercury conjunct Uranus. 
Today was exactly 8 TD’s from the previous top on April 26th. A 1.7% down move is perfect to launch the next wave up, which should take the SPX up as high as the 2431/32 area the day after OPEX, May 22.

May 9th sees the Sun trine Pluto, which portends weakening strength in the market ahead. Mars sq. Neptune on Thursday should mark a top and Friday Mars trines Jupiter, another slumping day likely. The week ahead looks weak in the early going and choppy to finish. Bradley turns this week May 8th and 12th.

Next week sees a Saturn turn May 17 along with a possible 7 week low. The last two days of the week could see some large gaps up, finishing the final top on May 22. 
There is a Bradley turn due May 19th as well as Saturn trine Uranus.  This general time frame should represent an important topping area. Longer term players should take heed: a possible bear market looms directly ahead into the summer!

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Thursday, May 4, 2017

Stock Market Update: May 4, 2017

The SPX looks to make a top on May 5 and a bottom on May 8th.  It is possible to see 2400 on Friday and 2361 on Monday.

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Wednesday, May 3, 2017

Stock Market Pull Back Shallow, More to Go

The market is gradually becoming oversold with much resistance.  The cycles suggest a low no later than around Friday this week.  May 17th is the next three week cycle top and is also a Saturn turn.  

Waves tend to equal each other in time and price, especially an “a-b-c” type advance.  We are in wave ‘b’ of that advance. This would suggest a low late in the week probably somewhere near to SPX 2361/62 and a final top (wave ‘c’) on May 17th near to 2431 (see chart below).

GDX will likely rally into week’s end to around the 22.50 area and then fall as the stock market rallies.  GDX should find its final low near 20.50 in the coming weeks.

Our SPX3 subs are still short, but eyeing the coming buying opportunity (you can see the sideways distribution pattern that usually comes first before a drop). This last ‘c’ wave should be it for the rally that started on February 11, 2016. I’m looking for a major summer low (Primary Wave 4?) and then one more strong rally into September 2018. September 2018 looks eerily similar to the 1929 top, in my opinion.  We are due.

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